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Advertising Is Dead

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Presentation given at the Inspire 2009 conference in Bucharest. Originally intended to be titled ´What if there was no TV´, during the preparation we noticed several trends that led us to change the title to Ádvertising is Dead´. Every new technology has a shorter curve from introduction to irritation. It´s time for a new approach, which we call the Attraction Model.

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Advertising Is Dead

  1. What if there were no more TV? FUTURELAB
  2. Outline speech Bucharest Need kickass opener Advertising is Dead FUTURELAB
  3. Actually…. FUTURELAB
  4. We are Futurelab FUTURELAB
  5. WE ARE FUTURELAB We create new profit opportunities for our customers. Our innovations and methods allow: • Marketers to become more effective & engaging. • Innovators to identify the next opportunity or niche. • CEO„s to connect their business to the customer. In the process, we challenge every barrier to business success. We dislike writing reports, billable hours or elaborate processes. Instead, we prefer to quot;get onquot; with making money for your business. FUTURELAB
  6. Futurelab Structure Priviliged Relationships Athens – Barcelona - Brussels – (Bucharest ) – Johannesburg – Hamburg – Moscow – Kiev - Munich - Shanghai A flexible boutique: 2 partners – 3 support staff – 9 associates – 28 specialists/contributors
  7. Last Year
  8. Last Year 76% of consumers don‟t believe that companies tell the truth in advertisements Yankelowich,2006
  9. Last Year “You can‟t bore people into buying your product – you can only interest them”
  10. The Consumer is Tuning Out • In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” (Jim Stengel, Global Marketing Officer, P&G) • A US hour of prime time TV carried 21 minutes of advertising, Late Night network shows like Leno or Letterman carry 31:27 (TNS Media Intelligence, Q1 2006) • Big Six study (US): People with DVR‟s watch 12% more TV, yet 90% of them adskip (Germany : 88.2%) • 78.2% of Germans are irritated by advertising, only 24% actually still watches it (GfK Marktforschung) • 85% of Chinese stop watching TV during commercial breaks. More than half change the channel, while the rest do housework, eat, chat or use the bathroom. (McKinsey & Co.) FUTURELAB
  11. Last Year “Today's marketing model is broken. We're applying antiquated thinking and work systems to a new world of possibilities.quot; Jim Stengel, Global Marketing Officer P&G
  12. Last Year Advertising Myths 1. Frequency is mostly not a driver for action 2. There is no golden rule about OTS
  13. Last Year • 54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners)
  14. Share of Voice?
  15. Last Year Advertising is a tax you pay for unremarkable thinking Robert Stephens, CEO, the Geek Squad
  16. Total Transparency • With total transparency, how can there be advertising? • Shotcodes in stores in Japan, telling you where to go to get the product cheaper • A fucked company example
  17. Prices aren‟t what they used to be
  18. Total Transparency
  19. Lawyers
  20. Lawyers
  21. Doctors
  22. Teachers
  23. Most influential information sources in purchasing electronic goods? (TOP 3) Magazines 11,7% Source % In-store Sales Associate 49 CMO Council‟s Retail Fluency Report, 2005 In-store demonstration 36 Word-of-mouth from family & 33 friends Newspaper Coupons 25 Television 37,8% Internet 21 News- papers Product/Company Information 16 25,9% Retailer information 14 Radio Internet 8% Other 14 9,7% Magazines 4 Share of total adspend by medium (global) % TV 4 2008 forecast (March 2008) Radio 3 What are we focusing on? FUTURELAB
  24. Now… People who live near train lines find ways to adjust to the noise ... Consumers have begun to treat encroaching advertising just like those trains.
  25. Banner blindness 1998!
  26. “Online video ads are quickly becoming the medium of choice to Online tactics in terms of ROI (2005-2007) drive both brand awareness and 57% sales.” SEO 45% 33% (2007) 44% Behavioral targeting 34% 36% 42% Email marketing-house list 47% 47% “With young adults now spending 34% on average six hours a week Paid search ads 49% 52% gaming, advertisers should be 21% Contextual targeting 29% excited at how well their 31% messages were embraced and the 10% Banner ads 12% brands positively perceived” 14% (2008) Rich media ads 7% 28% 38% 0% Pop-ups/pop-unders 15% 22% 23% 67% of marketers report they will Text-link ads 0% 0% increase their social media advertising budget in 2009 0% 10% 20% 30% 40% 50% 60% 2007 2006 2005
  27. Contextual advertising ...has just died
  28. • Advertising is dead – long live marketing Lets keep the patient alive a little longer
  29. Procter & Gamble is placing radio- frequency identification tags on products at a Metro Extra retail store in Germany so that when a customer pulls the product off the shelf, a digital screen at eye level changes its message At least be the first! 
  30. % of marketers advised by agencies to advertise in games/virtual worlds 62% % asked to start/increase viral marketing spend on social networks 87% % told by agencies to begin/increase viral video spend 93% Marketing Sherpa Ad:tech survey Lemmings?
  31. The Advertising Technique Hype Cycle Isnt there a bit much? Hey, actually this is cool Hmm – what‟s this? Naah, cant measure it Sooo 5 minutes ago
  32. Is it all over?
  33. It‟s only just begun
  34. FUTURELAB The Attraction Model
  35. Attention Economy Reputation Economy
  36. Relevance!
  37. Relevance Engagement Reputation Reputation x Relevance x Engagement = $$$
  38. Reputation Relevance Engagement FUTURELAB The Attraction Model
  39. Reputation Experience Listening Customers
  40. perception 80% of CEO‟s believe their brand provides a superior customer experience 8 % of their customers agree (Bain & Company) FUTURELAB
  41. Online Reputation Romania FUTURELAB
  42. The online reputation is just the tip of the iceberg But it can crash your boat Source: Forrester Technographics® - 2008 FUTURELAB
  43. So Listen! Because if you don‟t listen...
  44. “With regards to the recent Motrin advertisement, we have heard you. On behalf of McNeil Consumer Healthcare and all of us who work on the Motrin Brand, please accept our sincere apology. We have heard your concerns about the ad that was featured on our website. We are parents ourselves and we take feedback from moms very seriously. We are in the process of removing this ad from all media. It will, unfortunately, take a bit of time to remove it from our magazine advertising, as it is on newsstands and in distribution. Thank you for your feedback. It‟s very important to us.” Results 1 - 10 of about 11,600 from twitter.com for motrin. “hell hath no fury like a mommyblogger scorned”
  45. Reputation Relevance Engagement FUTURELAB The Attraction Model
  46. Relevance Insight Communication Commerce
  47. INSIGHT Understand what truly drives your customers FUTURELAB
  48. • Podcast and map downloaded Commercial – yet relevant
  49. FREE TIX TO GREAT ADVENTURE Heard a rumor you can get 2 free tix to opening day weekend at Great Adventure amusement park 45000 tickets gone in 5 hours
  50. Relevance of Commerce
  51. Downsizing
  52. Reputation Relevance Engagement FUTURELAB The Attraction Model
  53. Engagment Engagement Move the funnel • Funnel Content • Content Recommendation • Recommendation
  54. Funnel IGNORANCE NEED TRIAL REPURCHASE UPGRADE BRAND EXIT (c) 2007-2008, Futurelab – Used with Permission AWARENESS CONSIDERATION PURCHASE LOYALTY RECOMMEND
  55. Buzzmarketing
  56. Content wants to be free
  57. How to control millions of inaccurate and divergent conversations ? YOU DON‟T Consumers are beginning in a very real sense to own our brands and participate in their creation … We need to begin to learn to let go. A.G. Lafley, CEO and Chairman of P&G, October 2006 (cc) Lynette Webb, 2006
  58. „Help us choose‟
  59. Let them improve your products
  60. Let them build their own
  61. Roll your own commercials
  62. Second Life is soooo 5 minutes ago
  63. What IS it good for ?
  64. The Power of Recommendation
  65. The Power of Recommendation 1955 1967 1983 2001 2007 Word-of-mouth is 7x more effective than newspaper advertising, 5x stronger than a personal sales pitch and 2x as effective as radio advertising Marketing Science Institute, 2006 This is not exactly news....
  66. How can we measure all this
  67. HOW LIKELY ARE YOU TO RECOMMEND? Extremely Extremely unlikely likely 0 1 2 3 4 5 6 7 8 9 10 DETRACTORS PASSIVES PROMOTERS NPS™= (Promoters-Detractors)/Total Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld The Power of Recommendation
  68. Promoters make you more money -They spend more -They negotiate less -They stay longer -They are easier to service -They upgrade quicker -... Slide: Bain & Company, official NPS(tm) presentation Fred Reichheld. Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld The Power of Recommendation
  69. Activate your Fans
  70. Must See
  71. No, it’s not...
  72. So get some people…
  73. Where ARE the orcas? Who will be the First Penguin?
  74. • Traditional compensation & other systems stand in the way • Creative and media work in isolation • Lack of experience with new media (not everyone went “dot-com”) • Venturing into uncharted territory = risky (even on a personal level) • Nobody really knows how things will evolve
  75. General Eric Shinseki, Chief of Staff, US Army: quot;If you don't like change, you're going to like irrelevance even less.”
  76. GO DO IT
  77. • A deeper look at the model • How to improve the relevance of your mediamix • How to monetize WoM and Buzzmarketing • Social Networks more indepth • Net Promoter Score galore • Many many more examples and cases Tomorrow
  78. The Element of Surprise
  79. Http://blog.futurelab.net sko@futurelab.net if you want this presentation

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